Forecasting market trends just one year in advance is far from an exact science, but the United States Department of Agriculture has bravely ramped up the level of difficulty ten-fold by releasing new long-term projections for key agricultural sectors over the next decade.

The report, USDA Agricultural Projections to 2022, released yesterday, comes with the explanation that it is "one representative scenario" for the next 10 years based on existing knowledge, and is based on an assumption that there will be no domestic or external shocks to major markets over that time.

The beef industry outlook for the next 10 years is underpinned by an expectation that US herd numbers will bottom out at 89 million head next year before gradually rebuilding to around 94 million head in 2022.

From an Australian beef industry perspective, key messages include predictions that US imports of manufacturing beef will continue to increase over the next decade, as will US imports of grassfed beef from Australia and New Zealand.

The full report can be viewed by clicking here (the livestock section begins on page 82), but an overview of the 10 year outlook for beef production  is outlined below.

The USDA expects ongoing widespread drought conditions to delay an expansion of US cow inventories until 2014.

The combination of low cow numbers and the likely retention of heifers for breeding from that time will cause declines in US beef production through 2015.

As the reduction in overall meat production drives consumer prices higher and beef cattle prices higher, production will then rise in response.

US cow numbers are tipped to rise from about 30 million head at the beginning of 2014 to 33 million in the last several years of the 10-year projection period. 

The total US cattle inventory is predicted to drop to 89 million head at the beginning of 2014 before expanding to about 94 million by 2022.

Rising slaughter weights will contribute to longer term increases in US beef production. 

In the short-term, declines in meat production due to high feed prices, the economic recession, and drought which extended through much of the middle of the US in 2012, and increases in consumer prices, will continue to place downward pressure on per capita meat consumption in the US. 

In fact, total US red meat and poultry consumption is expected to fall below 200 pounds per head this year, for the first time since 1990.

The USDA expects total per capita consumption of red meats and poultry to rise moderately to 209 pounds by 2022. “As beef production increases in subsequent years, per capita consumption generally grows,” the USDA report noted.

US meat and poultry exports are also projected to grow over the next decade, based on steady global economic growth, a further depreciation of the US dollar, and the continued foreign demand for selected meat cuts and parts from the large US market.

“Most US beef exports are high-quality, grain-fed beef that typically go to Mexico, Canada, and Pacific Rim nations. 

“A continuing recovery is assumed for US beef exports to Japan and South Korea, export markets that were closed to the United States for several years following the first US case of bovine spongiform encephalopathy (BSE) in December 2003.”

The USDA forecasts continued strong demand for manufacturing beef imports over the next 10 years, and an increase in imports of grassfed beef from countries such as Australia and New Zealand, displaced from Pacific Rim markets by increasing US grainfed exports.

“US imports of processing beef increase in the projection period as herd rebuilding and relatively low beef cow slaughter in the United States raise import demand,” the report states. 

“As more beef demand in East Asian markets is met by US grain-fed beef, exports of grass-fed beef to those markets from Australia and New Zealand are likely to decline, diverting more grass-fed product to the United States.”

The USDA said the projections are based on specific assumptions about macroeconomic conditions, policy, weather, and international developments, with no domestic or external shocks to global agricultural markets.